Justice Settles with Conservative Groups That Sued IRS Claiming Targeting
Attorney general sides with those who argued tax agency acted politically.
In another sign of a fadeout of the four-year controversy over alleged political bias at the Internal Revenue Service, the Justice Department on Thursday announced that it had entered into settlements in two cases brought by conservative groups that claimed they were targeted for delays in their applications for nonprofit status.
“It is now clear that during the last administration, the IRS began using inappropriate criteria to screen applications for 501(c) status,” said Attorney General Jeff Sessions, referring to agency screeners who performed extra scrutiny on groups whose names contained words such as “Tea Party” or “Patriots” or “9/12.”
“There is no excuse for this conduct,” Sessions said. “Hundreds of organizations were affected by these actions, and they deserve an apology from the IRS. We hope that today’s settlement makes clear that this abuse of power will not be tolerated.”
Sesssions’ statement came soon after President Trump named a temporary Internal Revenue Commissioner to take over when John Koskinen steps down as his term ends on Nov. 12.
The Justice Department under both presidents Obama and Trump had determined that no criminal charges were warranted for the IRS’s mishandling of the applications for the groups seeking “social welfare” status, and the inspector general in several reports attributed the problem to mismanagement of applications from a variety of groups whose occasional political activism might have prompted rejection.
Sessions’ settlements, which require approval by district courts, come in two cases: Linchpins of Liberty v. United States, encompassing claims brought by 41 plaintiffs; and NorCal Tea Party Patriots v. Internal Revenue Service, a class action suit that included 428 members.
The settlements drew praise from Jay Sekulow, an attorney working for President Trump and longtime chief counsel of American Center for Law and Justice. In this “unprecedented victorious conclusion to a years-long legal battle against the IRS, the bureaucratic agency has just admitted in federal court that it wrongfully targeted Tea Party and conservative groups during the Obama administration and issued an apology to ACLJ clients for doing so. In addition, the IRS is consenting to a court order that would prohibit it from ever engaging in this form of unconstitutional discrimination in the future,” he said. “In a proposed consent order filed with the court yesterday, the IRS has apologized for its treatment of ACLJ clients…The IRS agency now expressly admits that its treatment of ACLJ clients was wrong.”
Another conservative group that claimed targeting, Houston-based True the Vote, whose own case is still pending, released a more negative statement: “The settlements are notable in that, for the first time, the IRS admitted their discrimination against conservative groups was wrong and unlawful. But what is to prevent it from happening again? Hollow apologies from the IRS won’t prevent future discrimination and abuse. The American people deserve more.”
Trump’s choice to serve as acting IRS chief is David Kautter, whom he named to the Treasury Department as assistant secretary for tax policy in May. Kautter was a partner in the tax practice for the RSM firm, which offers tax and audit services. Before that, he served as the director of the Kogod Tax Center at American University and had been director of national tax at Ernst and Young.
Kautter’s assignment as acting commissioner was welcomed by longtime IRS critic Rep. Jim Jordan, R-Ohio. “IRS Commissioner John Koskinen was appointed to the IRS to clean it up after Lois Lerner used her position to target conservatives. But instead, under his watch, subpoenaed documents were destroyed and bad employees were rehired,” Jordan said. “He should have been fired or impeached a long time ago. Thankfully his time as head of the IRS is coming to an end, and I look forward to new leadership for this scandal-plagued entity.”